Credit for Caring Act
Senator Shelley Moore Capito is a sponsor of the Credit for Caring Act, which would provide an up to $5,000 federal tax credit for eligible working family caregivers — which could help defray the nearly $7,000 that many families spend each year in out-of-pocket caring costs. The bipartisan, bicameral legislation was introduced by Senators Capito, Ernst, Bennet and Warren and Representative Sanchez, introduced May 18 in the U.S. Senate and House of Representatives, creates a new, nonrefundable federal tax credit to give eligible family caregivers who work a 30 percent credit for qualified expenses they paid or incurred above $2,000.
The credit could help offset the costs of services like home care aides, adult day care and respite care as well as home modifications like ramps and smart-home technology that make caregiving at home safer and easier. Investing in family caregivers means they can make fewer income sacrifices, incur less debt, and have more money in their pockets — which in turn will help to offset costs on necessary medical expenses, like wheelchairs and grip bars, for their loved ones.
The legislation may not only help individual caregivers make ends meet, but it could also boost the economy, according to an AARP analysis that found that if 50-plus caregivers have more support in the workplace, the U.S. gross domestic product could grow by an additional $1.7 trillion (5.5 percent) by 2030 This new federal tax credit will help eligible family caregivers address the financial challenges of caring for older parents, spouses, and other loved ones while remaining in the workforce.
The vast majority of individuals 50-plus (92 percent) support a federal tax credit for family caregivers. Family caregivers are the backbone of the U.S. care system, helping parents, spouses, and other loved ones live independently in their homes, providing about $470 billion annually in unpaid care. This care ultimately helps save taxpayer money by delaying or preventing expensive nursing home stays and hospital visits, though often at the cost of caregivers’ own financial security (including out-of-pocket expenses) and physical and emotional health. AARP believes family caregivers have earned support as they take on these costs and responsibilities which have been compounded by the COVID-19 pandemic.
How would the Credit for Caring Act work?
Eligible family caregivers assisting loved ones of all ages would receive the credit if the care recipient meets certain functional or cognitive limitations or other requirements certified by a licensed health care practitioner. The amount of the credit would be 30 percent of the qualified expenses paid or incurred by the family caregiver above $2,000, up to a maximum credit amount of $5,000. Individuals with higher incomes would be ineligible for the tax credit, and the bill includes provisions to prevent double-dipping with existing tax provisions.
A federal tax credit for family caregivers has strong support across party lines among individuals 50-plus, with 96 percent of Democrats, 95 percent of Independents, and 87 percent of Republicans supporting it.
The financial toll of family caregiving is growing, the Credit for Caring Act will help provide some aid.
If you agree, click here and tell Congress: Grant family caregivers the relief they need.
